Average Oregonian making $68,000 would pay $136 each year in payroll transit tax under transportation proposal

By Mia Maldonado, Oregon Capital Chronicle

Most public testimony submitted about the proposed transportation bill lawmakers are considering this special session has been in opposition to the bill, with many Oregonians writing to lawmakers that they want “no new taxes.”

Lawmakers are considering passing House Bill 3991, a transportation package that would raise $4.3 billion over the next 10 years by raising the gas tax by 6 cents, increasing vehicle title and registration fees and temporarily raising a statewide payroll tax for transit from 0.1% to 0.2%. 

House Minority Leader Christine Drazan, R-Canby, in a Facebook post called the legislation the “largest transportation tax hike in Oregon history.”

However, House Bill 3991 is not the largest transportation tax hike in Oregon history. The transportation package lawmakers passed in 2017 will raise $1.45 billion in the 2027-29 biennium, while this year’s proposed legislation would raise 60% of that amount — or $890 million — over the same time period, Oregon Department of Transportation spokesperson Jenny Cherrytree told the Capital Chronicle. Revenue for the 2029-31 and 2031-33 fiscal years is also expected to drop because of the 2028 expiration of the transit tax.

“If you work in our state, your payroll tax is doubling in this measure, which means you’re going to take home less to your families every single week,” Drazan said in a Facebook video. 

To put that into perspective, the Oregon Capital Chronicle has compiled a detailed breakdown of how much the payroll transit tax would cost Oregonians. 

How does the payroll transit tax work? 

“Payroll tax” is a general term for what’s taken out of your paycheck for tax purposes or social services. For Oregonians, this includes state and federal income tax, social security, Medicare, a workers fund tax, a paid leave tax and a transit tax.

The proposed transportation package would only raise the transit tax, which goes toward the State Transportation Improvement Fund. The fund started in 2018 to invest in public transportation improvements across the state. It provides free or reduced public transportation for students, rural and low-income Oregonians. 

Oregonians pay $1 out of every $1,000 of their wages to this fund. If the bill passes, that would double to $2 for every $1,000 between January 2026 and January 2028. 

So what would this cost the average Oregonian? 

A worker making the average Oregon salary of about $68,000 already pays $68 per year, or $5.60 per month, out of their paycheck toward the state’s public transportation fund. This would double to $136 per year, or $11.20 per month. 

To see a table of the annual amount Oregonians would pay in transit tax, click here.

Rep. Cyrus Javadi, R-Tillamook, was the only Republican House member to vote in favor of the legislation. While explaining his vote on the House floor, he said doing nothing is riskier than not passing the legislation.

“The truth is this isn’t some massive new payroll tax,” Javadi said in a Facebook post. “It’s a small adjustment to a very narrow slice of the payroll tax, and it keeps buses running in communities that depend on them.”

Oregonians would also have to pay more for:

• Passenger car registration, which would go up from $86 every two years to $170
• Motorcycle and moped registration, which would go up from $88 every two years to $172 
• Low-speed vehicle registration, which would go up from $126 every two years to $210
• Medium-speed vehicle registration, which would go up from $126 every two years to $210
• Title fees, which would go up from $77 to $216. Oregonians only pay title fees when they buy a car or move to Oregon from another state and need to title their car here. The average American buys a car every six to eight years, according to insurance industry data, meaning the $139 increase to title fees would amount to about $17 to $23 annually for the average duration of car ownership.
• Gas taxes, which will rise from 40 cents per gallon to 46 cents per gallon. How much gas Oregonians use varies widely depending on how far they drive and how fuel-efficient their vehicles are, but the state transportation department estimates the average Oregonian pays almost $160 in gas taxes each year with the current 40-cent-per-gallon tax.  

The transportation bill passed the Oregon House on Sept. 1. The Oregon Senate plans to vote on Sept. 17 for a vote. If passed, the bill would go to the governor’s desk where she is expected to either sign it into law or let it become law without her signature.

Mia Maldonado covers Oregon and state legislature with a focus on social services for Oregon Capital Chronicle. She started her career in journalism with Oregon Capital Chronicle’s sister outlet in Idaho, the Idaho Capital Sun. This story first appeared in the Oregon Capital Chronicle.